Hawkins v Hawkins - [2021] NZHC 1440

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2019-409-553

[2021] NZHC 1440

UNDER the Trustee Act 1956

IN THE MATTER

of the Heads Trust settled by Deed dated 3 June 2010

BETWEEN

ANGELA MAREE HAWKINS and ST MARTINS TRUSTEE

SERVICES LIMITED
Plaintiffs

AND

SAMUEL WILLIAM HAWKINS

First Defendant

continued……2

Hearing: 8 June 2021

Appearances:

G A Cooper and S C Cowan for Plaintiffs

J R Pullar and M P Davis for First Defendant No appearance for Second Defendant
No attendance required for First Third Party Appearance excused for Second Third Party

Judgment:

17 June 2021

Reissued:

21 June 2021

JUDGMENT OF ASSOCIATE JUDGE LESTER

This judgment was delivered by me on 17 June 2021 at 4.30 pm pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar 17 June 2021

NOTE: Pursuant to the slip rule, I re-issue this judgment with amendments to paragraph [5]

HAWKINS v HAWKINS [2021] NZHC 1440 [17 June 2021]

AND
MORHAWK (2017) LIMITED

Second Defendant

AND

ST MARTINS LAW LIMITED

First Third Party

AND

ERROL WILLIAM HAWKINS and DENISE JUNE HAWKINS

Second Third Party

Introduction

[1] This proceeding concerns the Heads Trust which the plaintiffs say was settled by a Deed dated 3 June 2010.

[2] The first named plaintiff, Angela Hawkins, is the sister of the first defendant, Samuel Hawkins. The second third parties, Errol and Denise Hawkins, are the parents of Angela and Samuel.

[3]I will use the parties’ first names to avoid confusion.

[4] Morhawk (2017) Limited (Morhawk) is a company incorporated by Samuel and Errol in March 2017 to purchase a business, that is, the lease of a camping ground in South New Brighton, Christchurch. The shareholders of Morhawk are Errol, Samuel and Samuel’s wife, Jacqueline Hawkins.

[5] St Martins Trustee Services Limited is the trustee company of a Christchurch law firm, St Martins Law Limited (St Martins Law). Mr Kenneth Marshall (Ken Marshall) practised as Kenneth G Marshall, Barrister and Solicitor, and he is the director of the second-named plaintiff trustee company.

[6] In early 2017, Mr Marshall sold his law firm practice to a Ms Sarah Clinch. Mr Marshall continued in the practice as a consultant. Ms Clinch started trading as St Martins Law from 1 April 2017.

[7] Errol and Denise were bankrupted in the second quarter of 2009. The bankruptcy appears to have been the result of a business failure.

[8] The evidence is that Denise received of an ACC payment which was apparently considered a personal payment to her and not subject to her bankruptcy. Errol and Denise wished to use this payment to purchase a section in Timaru and wanted to establish a Trust for that purpose, being the Heads Trust (the Trust). The issue in this application is the validity of that Trust.

[9]Samuel seeks summary judgment on the basis that the Trust is a sham.

[10] Accordingly, it is necessary to give more detail as to the circumstances surrounding the creation (or otherwise)…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2021] NZHC 1440
Decision Date: 17 June 2021

CaseChat Overview and Summary

This proceeding concerns the validity of the Heads Trust, which the plaintiffs claim was settled by a Deed dated 3 June 2010. The first defendant, Samuel Hawkins, seeks summary judgment on the basis that the Trust is a sham. The legal issues the court was required to decide include whether the Trust was a sham, and whether Samuel had met the high threshold for establishing that the Trust was intended to be a sham. The court found that the applicant had not met the high threshold for showing the only conclusion that could be reached, after a review of the facts and circumstances surrounding the initial creation of the Trust in June 2010, was that the Trust was intended to be a sham. The court also found that the plaintiffs' claim was not suitable for summary determination. The application for summary judgment was dismissed.

Orders